Scak Textiles: The Way Forward for Next-generation Entrepreneurs
In January 2020, the chief executive officer of the family-run business Scak Textiles LLP (Scak), based in India, was thinking about how the company could achieve a new milestone of 500 million in revenue by 2025. He wondered why the company, after coming so far, could not achieve that number with a sustainable margin. What else could he do to help Scak reached this target, and how could he solve the bottleneck of resource constraints?
The bright next-generation entrepreneurs of the family were taking an active interest in the business and had strategic plans for enhancing the effectiveness of both business and revenue models while navigating the ever-changing business ecosystem. The promoters of Scak wanted an outline of the entrepreneurs' recommendations with adequate assumptions and a business valuation. The promoters would expect a 15 per cent return on additional capital invested; the corporate tax rate would be 30 per cent. The next-generation family members saw three possible options: add manufacturing operations, establish e-commerce platforms for business-to-business and business-to-consumer businesses, or enter the business of exporting. Could they take up all three options, or should they maintain the status quo? The value and future of Scak would depend on their decision. Paritosh Basu is affiliated with NMIMS University. Sudershan Kuntluru is affiliated with Indian Institute of Management Kozhikode.